City faces the future after fall of the chocolate empire (From The Northern Echo)

City faces the future after fall of the chocolate empire

8:59am Thursday 21st September 2006

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CHOCOLATE, trains and tourism have long been three of York's most important industries.

The 1990s saw the closure of the city's carriageworks with the loss of 750 jobs.

Last September, Terry's of York closed its doors for the last time, leaving 300 people out of work after parent company Kraft transferred production to the continent.

Yesterday's announcement that York's remaining chocolate factory, Nestle Rowntree, is to shed 645 jobs came just six months after the company announced 243 redundancies.

Fortunately, the city's tourism industry appears to be in good health.

Figures announced earlier this summer estimated that tourists have spent a record-breaking £311.8m in York in the past 12 months.

Bosses at Nestle Rowntree expect that half of the latest redundancies will be voluntary, or through early retirement. They believe that 300 jobs could be created through the redevelopment of the Victorian half of the Haxby Road factory.

It was built in 1890. At the time, York was a centre of chocolate-making due to wealthy Quaker families like Rowntree and Terry, who tried to persuade workers to give up alcohol for cocoa.

Rowntrees can trace its origins back to 1725, when a Quaker called Mary Tuke opened a shop in Walmgate.

By 1785, the shop had started selling cocoa. In 1862, Henry Isaac Rowntree bought the cocoa side of the business. He was joined by his brother, Joseph, in 1869.

Fruit pastilles were introduced in 1881 and fruit gums eight years later.

When Henry died, in 1883, Joseph became the sole owner of the company.

He was anxious to improve the quality of life of his employees and provided them with a library, free education, a doctor, a dentist and a pension fund, as well as building housing for low-income families and opening Rowntree Park.

The company was taken over by Nestle in 1988 and flourished in the early 1990s.

The first sign that there were problems came on November 8, last year, when managing director Chris White left the company by "mutual consent".

In January, after new managing director Paul Grimwood had arrived, worried workers claimed major brands were selling so badly that production lines were being stopped.

Speaking yesterday, Mr Grimwood said it was not the beginning of the end for Nestle Rowntree in York.

He said: "We wouldn't be making a £20m investment if we were heading down a slippery slope."

Switching production of famous brands such as Smarties to the continent draws comparisons with Terry's, which transferred its Chocolate Orange and All Gold brands abroad last year.

Mr Grimwood said despite the heritage of brands such as Smarties, it had to be a business decision.

He said: "I have only been here since the beginning of January and my job is to make sure we have a strong business which is fit for purpose, not just for this year or next, but way beyond into the future.

"What I have tried to do today is make sure everybody knows what the plan is and has as much notice as possible, rather than do it on an ongoing basis, which is not the Nestle way.

"We would rather do it openly and honestly.

"The key to making sure we have got a good future here is making sure that we have a great manufacturing facility."

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